TeliaSonera Tips Hat to Mobile Data Caps

Telia Company president and CEO Lars Nyberg has no appetite for "all-you-can-eat" mobile data tariff packages.

Instead, he is a fan of imposing data usage caps on mobile broadband customers as a way to manage the surge in mobile data traffic volumes as well as the cost of upgrading network capacity, according to comments he made on Tuesday as TeliaSonera reported first-quarter results. (See TeliaSonera Reports Q1.)

“An absolute flat fee [for] all-you-can-eat won’t work,” said Nyberg, speaking on the first-quarter results conference call with analysts and media on Tuesday.

Like most operators, TeliaSonera is dealing with a deluge of mobile data traffic on its 3G networks. In the first quarter, the operator said that mobile data traffic more than doubled, compared with the same period last year and the number of mobile broadband customers increased by 436,000 in the quarter to 1.1 million. In 2009, mobile data traffic increased by 200 percent while the number of mobile broadband customers increased by 60 percent, says a TeliaSonera spokeswoman.

To avert potential investor worries that the increases in mobile data traffic will be a drain on capex, Nyberg pointed to the mobile data usage caps, along with the trend he sees in falling equipment costs, to explain how the carrier will be able to keep costs in check.

“We feel comfortable that we can handle the growth rate in traffic volumes without having to spend extra capex,” said Nyberg. “It’s vital to manage traffic volumes in line with our ability to grow the capacity -- that’s the challenge.”

Indeed, TeliaSonera for more than a year has offered mobile data tariffs for USB dongle users with monthly data usage limits in Denmark, Norway, and Sweden. In Finland, TeliaSonera recently introduced usage caps for mobile data on smartphones, according to a spokeswoman.

So what are the caps? Read on and find out:

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